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As environmental concerns continue to grow, sustainability has become a crucial aspect for real estate organisations. Developing a robust ESG strategy is essential for environmental protection, attracting responsible investors, and achieving long-term success. 

1. Undertake a comprehensive sustainability assessment

Conduct a comprehensive sustainability assessment that includes a materiality assessment to kickstart the process. Evaluate the organisation's environmental practices, energy consumption, water usage, waste generation, and carbon emissions. Additionally, identify social and economic aspects related to sustainability that are crucial for stakeholders and the environment. A materiality assessment helps prioritise areas of significant impact, financially and environmentally, guiding the development of targeted sustainability goals.

2. Engage stakeholders and employees

Engaging stakeholders is vital for the success of an ESG strategy. Collaborate with employees, investors, local communities, and industry partners to foster a shared commitment to sustainability. Seek input from relevant parties and address their ESG considerations and concerns. Conduct employee training and awareness programs to encourage active participation in sustainable practices. This collaborative approach ensures understanding, broader support and effective implementation of the sustainability strategy.

3. Align with external standards and certifications

To gain credibility and demonstrate commitment to environmental sustainability, align your ESG strategy with recognised external standards and accreditations. Consider obtaining certifications such as BREEAM (Building Research Establishment Environmental Assessment Method) or NABERS (National Australian Built Environment Rating System), both recognised globally for measuring and improving building energy performance. Our research indicates that buildings certified with BREEAM ratings tend to achieve higher occupancy rates and attract socially conscious tenants who prioritise sustainability.

4. Integrate sustainability into business practices

Incorporate green building practices and sustainable design into the core of your organisation. According to , the sales premium for green-rated buildings is 8-18%. Our also found a rental value uplift of 3.7%-12.3%. Focus on enhancing energy efficiency through smart building technologies, promoting renewable energy adoption, and utilising eco-friendly construction materials. Interestingly, our research found that the sales premium for NABERS-rated buildings of 5 stars or more is higher than that of BREEAM Excellent and Outstanding buildings. While a building certification can be dependent on the asset owner鈥檚 ESG targets, for those focussed on energy and carbon emissions reductions, NABERS is quickly cementing itself as an exemplar certification for buildings with carbon reduction targets.

5. Monitor, measure, and report progress

Continuous monitoring and measurement are essential for evaluating the effectiveness of your sustainability strategy. Regularly assess progress and compare it against established targets. Foster transparency by publishing ESG and sustainability reports highlighting any ESG investment and achievements and outlining continuous improvement plans. Sharing statistics from our research on sustainability's positive impact on property values and rental premiums can further bolster investor confidence and commitment to ESG efforts.

Real estate companies can develop robust and credible sustainability strategies by following these 5 essential steps. Embracing sustainability not only contributes to the UK's environmental goals but also positions your organisation as a responsible leader in the green economy, attracting investors and tenants who value sustainable practices.

The Real Asset Lifecycle 

We offer ESG advice at every stage of an asset's lifecycle, from land, investment, development and occupation to refurbishment, recycling and redevelopment. 

We can help you achieve your ESG goals and strategies at every stage, no matter what your objective is.

Explore and identify the relevant teams and services available to you.

How can we support your ESG strategy?

We work with occupiers, owners, investors and lenders to ensure that any economic headwinds, as well as climate and social transition risks, are anticipated and planned.

If you'd like to learn more about commercial property asset management, please reach out to our ESG Lead for Property Asset Management, Amira Hashemi.